The nuclear deal between Iran and P5+1 countries, and the subsequent lifting of sanctions has of course opened up numerous opportunities for both India and Iran in the economic sphere. (Photo: The Quint)

India-Iran Ties: Bonhomie and Balancing Ties with Saudi Arabia

Why is Iran important for India? What were some of the key outcomes of ministerial visits?

Iran is important strategically and economically for India. It
is for this reason, that after the US imposed sanctions on Iran, India was one
of the few countries which continued to trade with Tehran, much to the chagrin
of the US.

Economic Links

The nuclear deal between Iran and P5+1 countries, and the
subsequent lifting of sanctions has of course opened up numerous opportunities
for both countries in the economic sphere. India has already committed to
investing in the Oil, Gas, Petro-Chemical and Fertiliser Sectors.

So far India has been able to ensure that the ‘Pakistan, Saudi Arabia and Israel’ factor does not influence its relations with Iran. (Photo: iStock)

Chabahar Port

India’s most significant project in Iran is
the Chabahar Port, which will help in providing India access to Afghanistan and
Central Asia. Chabahar is in fact dubbed by many as India’s answer to the Gwadar
Port in Pakistan, which was developed by the Chinese. The distance between
Chabahar and Gwadar is 72 kilometres. During
the External Affairs Minister, Sushma Swaraj’s recent visit, the Iranian
President termed the Chabahar Project as the “defining partnership which has
the potential of connecting the entire region,”

In a recent
meeting between expert groups from India, Afghanistan and Iran in New
Delhi (April 11), the text of a trilateral transport and
transit pact was concluded. This pact is likely to be signed in Iran in the
next few months. One of the key thrust areas of
the agreement was the trade and transport corridors which will link
Mumbai to Chabahar and Afghanistan, via Zahedan.

Iran has also sought Indian assistance to
develop a 500-km-rail link from Chabahar to Zahedan, capital of Sistan. This
rail route will connect Chabahar with the International North South Transport
Corridor and link it to Central Asia. India shall be sending a team from IRCON
for discussions on this project.

India has
recently approved a 150 Million USD line of credit for Chabahar, and shall also
be providing 400 Million USD of steel rails. While for India, Chabahar is
strategically important. India has also committed to investing over 20 Billion
USD in Chabahar SEZ. The Indian Petroleum Minister expressed the desire of
Indian Petrochemical and Fertiliser Companies to invest in the Chabahar SEZ,
apart from an LNG plant and a gas cracker.

During the
Indian Foreign Minister’s visit, the Iranian President also spoke about greater
cooperation between both the countries against counter terrorism and Afghanistan.

ranian President Hassan Rouhani, second from left, reviews the guard of honour in Islamabad, Pakistan, March 25, 2016. (Photo: AP)

What is the role
of other countries in India-Iran ties?

So far India has
been able to ensure that the ‘Pakistan,
Saudi Arabia and Israel’ factor does not influence its relations with Iran, but
these three countries cannot be ignored, and Delhi needs to be very deft .

While Iran and India have totally de-hyphenated their relationship from Pakistan (which shares a border with Iran), the latter which is trying to get close to Iran has been trying to play spoiler. During the Iranian President’s Pakistan visit, the army chief Raheel Sharif is supposed to have raised the issue of RAW involvement in Balochistan. When asked by a Pakistani journalist about the same, the Iranian President was quick to state, that Tehran had a close relationship with both countries.

Rouhani’s visit to Pakistan came at a time when Kulbhushan Jadhav whom Pakistan accused of being an Indian spy in Balochistan was caught.

A suspicious
video with Jadhav’s confession was also released. According to Indian
intelligence agencies, Jadhav a businessman had been kidnapped from Iran. With
GHQ calling the shots and upping the ante against India, especially in the
context of fomenting trouble in Balochistan, it would be important to keep an
eye on how Pakistan reacts to the Chabahar Project and trilateral cooperation
between India-Afghanistan-Iran.

India’s ties with
Saudi Arabia too have strengthened not just in the economic sphere, but also in
the strategic sphere. A clear instance being the extradition of a number of
terrorists including Abu Jundal, an LeT operative and one of the handlers of the
26/11 attacks. Defence collaboration between both countries has also been
enhanced.

While so far this
has not impacted India’s ties with Iran, it remains to be seen how they
balance it out. The two Ministerial visits to Iran (Sushma Swaraj and Dharmendra
Pradhan), with substantive agendas, are being seen as a message from the NDA
Government, that while strengthening ties with Riyadh it clearly cannot afford
to ignore Iran. A Prime Ministerial visit to Iran is also on the cards.

Likely
challenges to the India-Iran relationship

The first challenge
is whether India can follow up on all the promises, especially in the context
of the Chabahar Port. In the aftermath of the sanctions, a number of countries
including China are wooing Iran, and India will have to up the game and be
prompt in implementation.

Second, balancing ties with Saudi Arabia will be a tough task, especially after
the increased hostility between both countries in the aftermath of the recent
OIC summit at Istanbul. The cause for
this, was a statement – largely Saudi driven -- which was critical of Iran for
promoting terrorism, but also interfering in Saudi Arabia’s affairs and
attacking Saudi missions in Iran.

Third, while the
Obama administration has been pragmatic in its approach towards Iran, which has
played a positive role in further strengthening India-Iran ties, it remains to
be seen whether a new US Government (Democrat or Republican) is as open towards
Tehran.

(The writer is a New Delhi based Policy Analyst
associated with The Jindal School of International Affairs)